Korean stocks drift lower on Trump fears

South Korea’s stock market indexes drifted lower Wednesday on prevailing risk-averse investor sentiment due to uncertainties in the United States.

The main bourse benchmark Kospi closed at 2,028.01, down 1.3 percent, while the second-tier benchmark Kosdaq slid 0.6 percent to close at 665.74. 

Both markets suffered strong net sales from retail investors. They net sold stocks worth 468.1 billion won ($415.8 million) on the main bourse and shares worth 348.7 billion won on the second-tier market. Stock markets in Korea did not operate Tuesday for the Christmas holiday.

Market bellwether Samsung Electronics, whose market cap accounts for about one-fifth of all Kospi-listed companies, dropped 1.2 percent.

This came in line with plunges on Wall Street on fears stemming from US President Donald Trump’s reported discussions on dismissing US Federal Reserve Chairman Jerome Powell, as well as an ongoing partial US government shutdown.

Han Ji-young, an analyst at Cape Investment & Securities, advised stock investors to adopt a wait-and-see stance until early January in a note to investors Wednesday, saying US woes have “severely dampened” investor sentiment.

“Until recently in December, emerging markets’ losses have been comparatively milder than those of developed markets,” Han wrote. “But now we should not single out the possibility that emerging markets are ahead of a bearish turn.”

By Son Ji-hyoung 
(consnow@heraldcorp.com)